Skip to Main Content

Florida's investment in building codes pays off

There could hardly be a better laboratory to test the benefits of strong building codes than Florida in the first decade of the 21st century. From 2001 through 2010, hurricane tracks are a thicket of lines in every direction over the state, touching everywhere from Pensacola to Jacksonville to Key West.

'Test bed' for tougher codes

The official response to Florida’s hurricane exposure adds to the state’s value as a test bed for tougher building codes. Hurricane Andrew in 1992 reset the understanding of how costly a storm could be and exposed profound weaknesses and inconsistencies in Florida’s patchwork of local codes. The legislature then created and implemented the statewide Florida Building Code.

A team of experts explored the results in a study titled The Role of Effective and Well-Enforced Building Codes in Reducing Wind-Driven Losses: The Case of Florida. The research was conducted by the Wharton Risk Management and Decision Processes Center, the National Center for Atmospheric Research (NCAR), and Austin College. James Done, a project scientist with NCAR, presented the findings as part of Verisk’s Monday Web Seminar Series, and it’s available for on-demand viewing.

In Florida’s rich history of hurricanes, the 2000s produced an anomaly to rival Andrew: not a single storm of comparable strength, but seven hurricanes in two years—2004 and 2005. The study focused on those years.

During the project, ISO’s Building Code Effectiveness Grading Schedule (BCEGS®) proved its worth both as a tool for study and as a practical means of raising real-world standards. Through BCEGS, ISO’s Community Hazard Mitigation team collects and analyzes information from communities about their building code adoption and enforcement practices and then assigns a Building Code Effectiveness Classification from 1 to 10, with class 1 indicating exemplary commitment to building code enforcement.

The BCEGS program has wide participation from communities and insurers in Florida. The state requires insurers to use the corresponding premium discounts and assesses a surcharge on all policies for nonparticipating communities. BCEGS became the natural yardstick in the study to measure Florida’s local building codes across time. Property losses then were checked against BCEGS scores by ZIP code to see how they correlated.

The result: Florida ZIP codes with favorable BCEGS ratings had 15 percent lower windstorm losses than those ZIP codes deemed inferior. When strong BCEGS scores were combined with newer construction—that is, construction more likely conforming to recent building codes—windstorm losses were cut roughly in half.

The study combined three elements that fed into ultimate losses:

Hazard: Specifically, the study looked at wind speed and duration. The latter factor is critical because the longer high winds persist, the greater the fatigue on structural elements and the greater the risk of damage from airborne objects and wind-driven rain. Hurricanes of similar strength but different size can produce vastly different losses because a larger storm has a broader wind field and takes longer to pass over a given point. The massive Hurricane Ivan in 2004 caused $14.2 billion in insured losses, while the relatively compact Dennis in 2005 caused just $2.2 billion in losses—even though both were Category 3 at landfall near the Florida-Alabama border.

Exposure: Broken down by ZIP code, exposure encompasses density of housing, the proportion of mobile homes, income, growth of construction, the number of policies in force, total premiums collected, and the number of claims. Mobile homes, while more fragile, generate lower claims because they’re less expensive and easier to replace than brick structures.

Vulnerability: Also by ZIP code, the study looked at distance to the coast, percentage of policies written by Citizens Property Insurance Corp. (Florida’s property insurer of last resort), year of construction, and the local BCEGS ratings. For purposes of the study, BCEGS scores were divided into favorable (ratings from 1 to 4) and unfavorable (5 to 10 or no rating), with most falling in the range of 2 to 6. The most common rating was 4, accounting for 45 percent of ratings from 1995 to 2015. When ratings were broken down further by code strength and enforcement, local governments generally fared better on the strength measure; more than half achieved a score of 2 or better. Enforcement scores clustered in the range of 3 to 5.

Investment will pay for itself

Under strengthened building codes, the study found, four dollars in losses were saved for every dollar spent on compliance in new construction, and an investment in stronger codes will pay for itself in about 12 years. The authors concluded that the economic effectiveness of the Florida Building Code should encourage other states to consider similar codes. We couldn’t agree more.

For more information on the BCEGS program, please visit our website.

Dale Thomure

Dale Thomure is the manager of ISO Community Mitigation at Verisk. You can contact Dale at

Visualize Subscribe

Get the best of Visualize!

Get the latest news and insights straight to your inbox.

Subscribe now

You will soon be redirected to the 3E website. If the page has not redirected, please visit the 3E site here. Please visit our newsroom to learn more about this agreement: Verisk Announces Sale of 3E Business to New Mountain Capital.